Navigating Market Cycles with Active Agility

In an era where many investors default to "set it and forget it" passive funds, the value of active management is more apparent than ever. While passive indexing provides broad market exposure, it also leaves you fully exposed to every downturn without a safety net.

The Power of Tactical Rotation

Our U.S. Markets Rotation strategy exemplifies why being proactive matters. Instead of remaining static, this strategy performs a monthly evaluation to identify the top-performing segment of the market—whether that’s the S&P 500 or the Nasdaq 100, etc.—for the upcoming month.

By the Numbers: Active vs. Passive (2015–2025)

The data from the past decade tells a compelling story of active outperformance:

• Cumulative Growth: Over a 10-year period ending December 31, 2025, the U.S. Markets Rotation strategy grew an initial investment significantly more than the benchmark.

• Outperformance: The strategy achieved a final portfolio value of $48.00K, notably higher than the S&P 500 Total Return benchmark of $39.83K.

• Non Correlated Returns: In every given year, the strategy can go up when the markets go up, the strategy can go down when the markets are up. Looking at how returns are derived over a long-term time horizon is what makes this strategy so appealing.

  
  

  

Why Choose Active Management?

1. Risk Mitigation: Active managers can move to defensive positions or "sideline" assets during downturns, whereas passive funds must follow the index all the way down.

2. Exploiting Inefficiencies: Skilled managers use research to identify mispriced assets, aiming for "alpha"—returns that exceed what the broad market provides.

3. Tailored Goals: Active management allows for a portfolio that aligns with your specific risk tolerance and long-term financial goals, rather than a one-size-fits-all index.

If you're concerned about the future returns or volatility of the stock market, you need to look further into this type of strategy.

Tyler Vanderbeek, CFP, CMT.

Disclosure:

THIS REPORT IS NOT AN INVESTMENT REPORT. DO NOT RELY ON THIS REPORT AS PORTRAYING, OR CONTAINING PERFORMANCE OF AN ACTUAL ACCOUNT. THIS REPORT CONTAINS HYPOTHETICAL MODEL RETURNS OF A PORTFOLIO AND IS FOR ILLUSTRATIVE PURPOSES ONLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE. Clients & Advisors should do their due diligence before investing. Securities offered through Connect Financial Advisors, Registered Investment Advisor.